The country in Europe where house prices have skyrocketed in just a year | World | News

In the latest housing market figures released by Eurostat, Poland has claimed the spotlight for recording the European Union‘s second-highest annual growth in house prices.

The data from the third quarter of 2023 revealed a remarkable surge of 9.3 percent in housing prices compared to the same period the previous year, placing Poland just behind Croatia, which witnessed a growth rate of 10.9 percent.

The driving force behind this rapid ascent is attributed to the introduction of a mortgage subsidy scheme for first-time buyers in the summer of 2023.

The scheme, implemented by the government, led to a staggering 4.5 percent quarterly growth, marking the highest among the 29 countries surveyed, which includes the EU’s 27 member states plus Norway and Switzerland.

The innovative mortgage subsidy programme, initiated by the government in July, offered first-time buyers a mortgage with a guaranteed interest rate of 2 percent over ten years, with the state covering any discrepancies compared to the market rate.

The response was overwhelming, as mortgage applications recorded a three-fold year-on-year increase in July, reaching a peak in December as the scheme concluded.

While the subsidy programme has since been halted due to depleted funding, the new government, which assumed office in December, is contemplating the possibility of introducing a more restricted programme by mid-2024.

The housing market in Poland continued to surge in the last quarter of 2023, with some large cities, including Poznań and Kraków, experiencing annual growth rates of up to 30 percent. This rapid escalation can be attributed not only to the mortgage subsidy scheme but also to a severe housing shortage.

Estimates suggest a deficit of as many as four million housing units, making it challenging for young Poles to enter the property market. Nearly half of the country’s youth live with their parents, one of the highest figures in the EU.

According to Politico, Warsaw ranks as the fourth-hardest EU capital for local residents to buy a house, trailing only behind Paris, Prague, and Bratislava.

To buy a 75-square-metre flat in Warsaw, one would need to set aside an average local salary for almost twenty years, compared to just over 23 years in Paris, according to Politico’s calculations.